Lottery games have become a time honored method of raising revenue for state and federal governments the world over. Traditional scratch-off and on-line games have evolved over decades and supply increasing revenue year after year. However, after decades of growth, the sales curves associated with traditional games seem to be flattening out. Consequently, both lotteries and their service providers (e.g., Scientific Games, GTech, Pollard Banknote, Intralot, etc.) are presently searching for new forms of gaming.
To date there has been much speculation about providing various lottery products to the consumer over the Internet. The benefits are obvious; greater accessibility and a richer gaming environment for the player will result in enhanced sales. However, there are various United States federal laws that bring into question the legality of such an enterprise. Specifically, laws that require proof that the Internet gaming experience took place within the jurisdiction of the lottery authority (e.g., a given state's boundaries) and require that the consumer of the lottery Internet product is of legal age. These are particularly challenging obstacles, given that a violation of either requirement (i.e., location or age authentication) could result in felony charges against the institution running the Internet lottery operation.
Additionally, any attempt at implementing a new legal (i.e., lottery based) Internet gaming product invariably involves developing new costly infrastructures for sales and redemption as well as the gaming environment itself. It is therefore highly desirable to develop a system for authenticating age and location for Internet gaming as well as ensuring that said system could be readily integrated into an existing lottery's infrastructure.
Partially because of these legal hurdles and auditing requirements, any proposed Internet lottery game to date has been of a deterministic nature—i.e., the outcome of the game is determined before it starts. While the Internet does offer the ability to enhance the deterministic gaming experience, the very nature of deterministic games limits the enhanced experience and ultimately causes the games to seem stale to experienced consumers. The lack of game-dynamic-player-input ultimately limits the Internet gaming experience. Thus, it is highly desirable to also develop an Internet gaming platform that not only conforms to legal requirements but also allows for dynamic play (e.g., a player is allowed to vary his bet and cash out at any time) resulting in a more fulfilling Internet gaming experience.